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Tag: digital economy

Recently, Grattan Institute here in Melbourne published a report on peer-to-peer (P2P) economy arguing it could save Australians $500 million on taxi bills, help them use underutilized assets and generate income and increase employment and income for people on the fringe of the job market. The report argued that governments should adopt policies to facilitate growth of these businesses while also regulating for downsides. It is a worthwhile report to read.

What I’d like to raise as an issue is not the content of this report but the scope. First, the report has left out discussing benefits of a large portion of P2P economy that is commons-based and framed “the” P2P economy as businesses who own proprietary online platforms that allow people to “sell” their services (let it be provision of a ride or a clean bed or use of a product for a few hours) to others. The businesses thus enable “micro-businesses” –which is great- but without necessarily empowering those micro-businesses by enabling them to contribute into the development of the platforms, co-designing of the business model the “mother” corporation operates under or by providing a fair share of the value generated although the overall value in these systems are generated by those micro-businesses.

Grattan Institute’s report is unfortunately not the only publication that overlooks the commons-based P2P economy; this is a common attitude in media and research institutes alike. This could potentially be attributed to the high lobbying power that is held in the hands of “sharing economy corporates”. For example, I remember attending a “policy pitch” event at the Grattan Institute in February 2015 on “regulating the peer-to-peer economy”. This event featured David Plouffe, Uber’s Senior VC of Policy and Strategy at the time, who is in fact a political strategist and was the campaign manager of Barack Obama in 2008. He flew all the way to Australia to legitimize Uber which was facing a for amount of rage from the taxi sector as happens in every city Uber “disrupts”. Since then, us Uber users in Melbourne receive offers from Uber to cuddle kittens in our offices for 15 minutes delivered by Uber drivers etc; we’re used to Uber “making our day” through advertising campaigns all targeting the correct demographics and therefore cannot say no when we receive messages that go like “Sign a petition so that Uber is not banned in your city”.

The neglected part of the P2P economy needs more attention though; first technically it has been around much longer than the uberised versions and can easily be traced back to early days of open software movement. Second, there is a lot of under-appreciated value in commons-based P2P economy. To understand this a bit more, particularly in the context of sustainability transitions and resilience in cities, we in VP2040 project undertook some exploratory research that also involved an expert consultation and prepared a summary report of our findings.

I strongly recommend a full read; it’s an interesting report with references to lead thinkers in this area and features the best examples of peer-to-peer commons economy. But for those who prefer protein drinks over real meals because they’re too busy to indulge in life, here’re the key messages:

There are three value models competing for dominance in the digital economy: traditional proprietary capitalism, peer-to-peer exchange and peer-to-peer commons models. The latter two were relevant to our investigation.

In a peer-to-peer commons economy there is an effective creation AND sharing of a resource by peers. A peer-to-peer exchange model is about creating and financially benefiting from platforms that connect peers to trade, sell, or rent excess idle resources. The difference between the two value models is a lack of consideration and contribution into the commons in the implementations based on the latter model.

The direct socio-environmental impacts of the two peer-to-peer value models are similar. The main differences are indirect and structural and stem from the different implications of the two value models in business model development, product and service design and structure of wage-labour relationships. See table below.

Summary of indirect and structural socio-environmental impacts of the two value models

Peer-to-peer exchange model

does not address overconsumption or deal with consumerism at a cultural level

the dematerialisation effect observed by some is not because there is less material throughput in the economic system, it is because there is an additional, very resource efficient economic sector based on cognitive labour

does not raise environmental awareness as argued by some but only reinforces the existing awareness (at best)

planned obsolescence is an inevitable part of business models which are for-profit

the users are not contributors to the platforms which creates a wage-labour dependency

Peer-to-peer commons model

assists with re-establishing the relationships between workers, products, users and means of production through localisation and direct participation (except in cases in which low-cost raw materials come from somewhere else)

encourages diffusion of local knowledge, therefore incentivises designs that suit best to the context

encourages higher resource efficiency (planned obsolescence and other means of creating artificial scarcity is contradictory to the logic of a commons based economy)

circulation of commons does not necessitate an increase in scale as the value is created by a reciprocal relation between benefit and nurture. Nevertheless, the peer-to-peer commons value model is agnostic about growth which might be a barrier for sustainability because any digital commons necessitate natural commons

A digital economy in which a set of companies own or control important city data poses a danger for cities as it creates the risk of ‘data feudalism’ as well as incentives for business models that undermine sustainability and resilience. There are also unresolved ethical questions about ownership and use rights of data generated by citizens through the use of proprietary or non-proprietary peer-to-peer platforms.

There are different options for how digital technologies can be deployed in cities depending on which technologies and business models are implemented. However, it is uncertain which options will yield to highest sustainability and resilience outcomes.

Based on the expert consultation and our research findings and reflections, we proposed the following policy recommendations under four main categories: